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Tokyo, July 25: Japan's Toshiba Corp., Fujitsu Ltd. and NEC Electronics Corp. are in talks to jointly develop advanced 32-nanometre chips to better keep up with rivals, the three companies said on Wednesday.

The companies aim to set up a joint venture to mass produce chips used in flat TVs and other high-power home electronics as early as 2010, with Toshiba expected to hold a leading non-majority share, the Nikkei business daily said the same day.

The joint venture idea and other schemes have been discussed but nothing has been decided, the three companies said.

The three firms and others have been in talks about shouldering the estimated 100-200 billion yen ($830 million-$1.66 billion) development costs to help compete against chip industry leaders such as Intel Corp. and Samsung Electronics Co.

Chip makers are racing to halve the production cost per function of a chip every year or two a trend known as Moore's Law, named after a co-founder of Intel.

In May, Samsung, IBM, Chartered Semiconductor Manufacturing Ltd., Infineon Technologies and Freescale Semiconductor said they would work together on 32-nanometre chips. A nanometre is a billionth of a metre.

Toshiba, NEC Electronics and Sony Corps had teamed up to develop chips with 45 nanometre features.

Toshiba was the world's No.4 maker of chips in terms of revenue in 2006, NEC Electronics ranked No.11, while Fujitsu ranked 27th, according to research firm iSuppli.